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America DATA ANALYSIS


Young Adults Drive Surging Housing Market


O BY RAGHAVAN MAYUR AND TOM WESTERVELT


one decade after the sub-prime mortgage crisis triggered a global reces- sion, the housing market


is making a roaring comeback. Young adults, long sidelined by


weak employment and stagnant wages, have begun taking the giant leap into homeownership amid a strengthening economy. While few sectors were spared


the Great Recession, housing and home construction were particularly devastated by the economic downturn. The housing collapse resulted


in declining home values, lower homeownership rates, and close to 10 million foreclosures. Research suggests that households lost more than $7 trillion in home equity between 2006 and 2012, leaving many homeowners strapped with “underwater” mortgages. Further, as unemployment rose


and incomes fell, demand for new homes weakened significantly, stymieing new home construction. Today, with the bleak days of the


recession receding in the rearview mirror, the housing sector is in the midst of a major resurgence, largely driven by pent-up demand for new homes, especially among first-time buyers.


Encouraged by an improving


economy and a labor market edging closer to full employment, consumers are increasingly more confident about the market. According to a recent study conducted by TechnoMetrica for the National Association of Realtors, nearly three-quarters of Americans


18 NEWSMAX | MAY 2018


Amid greater employment opportunities and increased income growth,


young adults are finally entering the housing market.


(72 percent) believe that now is a good time to buy a home, up from 64 percent in 2011. A 2017 Harvard study estimated


that home sales have risen 33 percent from the post-recession low set in 2010. Further, sales of existing homes reached their highest level since 2006 last year, according to the


National Association of Realtors. It is not surprising, therefore, that the U.S. Census Bureau reported the highest homeownership rate in three years for the third quarter of 2017, at a share of 63.9 percent. Consumers aged 36 and under represent the largest share of homebuyers in the United States, according to NAR data. In addition, a 2017 survey conducted by Realtor. com found that 52 percent of those planning to buy a home would be first-time homebuyers, compared to 33 percent in 2016. Of this majority, 61 percent are under 35 years old. Amid greater employment opportunities, increased income growth, and rising rents, young adults are finally entering the housing market. According to a recent NAR survey,


nearly two-thirds (63 percent) of consumers aged 34 or younger believe that now is a good time to buy a home. Furthermore, 94 percent of millennials told NAR that owning a home is crucial to achieving the American dream. It is not surprising, therefore, that the homeownership rate among those aged 35 and under has improved from 22.8 percent in 2012 to 36 percent in 2017. Therefore, with millennials embracing homeownership at such a brisk pace, the housing market will continue its strong momentum into the foreseeable future.


Raghavan Mayur is the president of TechnoMetrica Market Intelligence, and directs the Investor’s Business Daily/TIPP Poll. Tom Westervelt is a research analyst at TechnoMetrica Market Intelligence.


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